While plenty of housing indicators compare home sales from one month to another and look at year-over-year sales, CoreLogic, a property data analytics firm, dug a little deeper to see whether the national housing market has fully recovered from the foreclosure crisis and recession.
The company found that home prices and mortgage delinquencies have returned to their pre-crisis levels and the number of homes sold each year still lags behind pre-crisis levels.
When comparing the number of home sales, including resales and newly built houses, CoreLogic found that the level of sales was the same in 2017 as it was in 2002, before the housing boom, at about 6 million homes annually. However, that comparison ignores household growth patterns. About 15 million more households have been created since the early 2000s, which implies that more home sales are required to meet that demand.
CoreLogic compared the single-family turnover rate — which is the total number of single-family home sales divided by the number of households. The average turnover rate from 2000 to 2003, before the housing boom, was 5.8 percent. Turnover accelerated during the housing boom and dwindled to a low rate during the recession. But the post-recession recovery has flattened to 5.1 percent between 2016 and 2018.
By CoreLogic’s analysis, this translates into 1 million fewer sales per year compared to before the housing boom. Those sales are lower in part because of the reduced availability of homes, according to CoreLogic. Other potential reasons could be affordability concerns and delayed homeownership among millennials. Whether that will change over time remains to be seen.